Oil Forecast Update And Follow Up

Hi Traders! Oil forecast update and follow up is here. On June 29th I shared this “Oil Forecast And Technical Analysis” post in my blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!

My Idea

On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Also, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bearish pressure. Until the strong resistance zone (marked in blue) shown in the image below holds my view remains bearish here and I expect the price to move lower further.

Oil H1(1 Hour) Chart Current Scenario

On the H1 chart, my view was bearish and I was expecting the price to move lower further until the strong resistance zone holds. The price action didn’t follow my analysis here and this idea failed as the price moved higher and broke above the strong resistance zone and is currently holding above it. Also, based on the MACD indicator we could see that the price has created higher highs, I see these as contradictory signs opposing the bearish view. Thus the bearish view has got invalidated here, my current view on Oil is neutral.

So traders, this is why I wanted to show this example to help you understand why we should always trade based on the facts and hints provided by the market and take the right actions according to that. Even though we had facts supporting the bearish view here, the price didn’t hold below the strong resistance zone, the price moved higher and provided a valid breakout above the strong resistance zone and is currently holding above it. Also, the price has created higher highs, based on the MACD indicator which I see as contradictory signs. You should always keep in mind that losses are part of trading we can’t expect every trade to go as per our plan and provide us profits. In trading, we can’t avoid losses but in order to be successful in trading, we should know how to cut losses early and how to manage the trade when the price goes in the opposite direction. When you see contradictory sign like this opposing our view then it is always recommended to cut your losses early and get out of the trade.

Note: You can watch my webinar on how to cut losses early here

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Vladimir Ribakov
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Vladimir Ribakov

Following 11+ years of trading experience, trading my own accounts as well as for hedge funds and brokerages, I have decided to fulfill my destiny and to personally mentor Forex and Commodities traders. When I released the “Broker Nightmare” (software that hides trades from brokers) 8 years ago, I found an overwhelming number of frustrated people who genuinely wanted to learn how to trade the Forex market, but instead found themselves scammed and misled. Over the years I have also release other trading systems based on my trading strategies, and met a lot of people on my worldwide Forex seminars. We’ve formed a close Forex community and we meet once or twice a year in various locations in Europe.